Stanmore announces quarterly report

Highlights

• Record quarterly run of mine (ROM) coal production.
• Highest quarterly coal sales by volume and value since March 2019 quarter.
• Approvals process for the Isaac Downs Project completed, with the mining leases granted by the Minister for Resources and first coal shipments of trial cargoes from the bulk sample pit.
• First ROM coal produced by the Millennium and Mavis Downs mine during the quarter.
• Strong coal prices provide confidence of significant improvement in Stanmore’s net debt position over the next 12 months.

Safety performance

During the quarter, there was one recordable injury. The 12-month rolling TRIFR at the end of the quarter was 5.4 (3.3 at September 2020).

Stanmore participated in the industry wide safety reset process with introductions to all crews from Scott Stewart, Minister for Resources, stressing the importance of workplace safety.

Isaac Plains Complex Operations

Production output increased in 3Q21 as the Isaac Downs bulk sample operation ramped up operations. In particular, the EX3600 excavator operating at the Isaac Downs site recorded industry best practice productivity rates. During the period, the dragline operation at the Isaac Plains also operated at close to peak.

3Q21 coal sales (723 000) reflected strong mine and coal preparation plant performance that produced 653 000 t of saleable coal (approximately 96% metallurgical and 4% thermal coal).

The company anticipates coal mining production and corresponding sales to continue to strengthen in 2H21 relative to 1H21, expecting the lower end of the 2.2 – 2.4 million t range for full year 2021. The rate achieved for 3Q21 matches the current system capacity levels of 2.4 million tpy for saleable production. Further opportunities to increase volumes are being investigated to capture the benefits of improved coal market conditions, strong demand, and improved coal prices for seaborne metallurgical coal.

Isaac Downs

During 3Q21, the company announced the approval of the mining lease for Isaac Downs Mine. This is a significant milestone for the company, and all environmental and mining approvals are now in place for the new mining operation. Initial capital expenditure of AUS$47 million was also announced for the development of the mine, and AUS$40 million worth of contracts have been executed with Queensland companies for the construction of the Peak Downs Highway underpass bridge and highway re-alignment, the haul roads linking Isaac Downs with the existing Isaac Plains mine, and the 6 km long flood protection levee. The board has also authorised a further AUS$9 million worth of expenditure, including additional water management infrastructure, further power line works and establishment of sub-stations, and the construction of explosive reload facility and magazine.

Construction activity during 3Q21 is now well established with work on the flood protection levee, haul road and the Peak Downs highway underpass construction all progressing while the initial bulk sample mining operation is completed, and the pit is expanded into the newly approved mining areas.

The bulk sample pit for the purposes of providing trial cargoes to key customers has been successful with no material coal quality issues raised by key customers.

Millennium and Mavis Downs Mine

Operations at the Millennium and Mavis Downs mine commenced during the quarter suing a coal auger contractor to extract coal from available standing highwalls. During 3Q21, ROM coal production commenced with 6000 t produced on a 100% basis. Stanmore’s share is 50% through the ownership of MetRes Pty Ltd, the company which acquired the mining tenements and assets associated with the mine from Peabody. ROM coal was transported to the stockpile at the Red Mountain Infrastructure Coal Preparation Plant ready for the initial toll washing operation, which is expected to commence in the December quarter.

A key milestone was also achieved during the quarter, with the commencement of overburden mining operations to establish remnant opencast mining areas.

As previously announced, contracts are in place for the underground mining operations scheduled for commencement in 2H22.

MetRes, Stanmore, M Mining and M Resources hosted the official opening of the operation with Scott Stewart, Minister for Resources, attending along with Anne Baker, Mayor of Isaac Regional Council, the Directors of Barada Barna Charitable Trust, representing the First Nations people of the region, and representatives of the company’s customers and suppliers.

Read the article online at: https://www.worldcoal.com/exploration-and-development/02112021/stanmore-announces-quarterly-report/